Overview of the Indian Auto Industry

India was the fourth largest car manufacturer in the world in 2017¹. Indian auto manufacturers produced a record 29.1 milion motor vehicles in 2017-18 (Apr-Mar) incl. 4.01 million passenger vehicles. India was the largest manufacturer of three-wheelers (1.02 m units) and eighth largest commercial vehicle (0.83 m units) manufacturer in 2017 while India's two-wheeler manufacturers rolled out 23.1 m units during 2017/18. The tractor industry sold ca 0.58 m units or around a third of the global output during 2016/17. Construction vehicle production was approx. 59 000 units in 2014. 2.17 million passengers cars were sold in India in 2017-18 (1.17 m during H1 18/19). The total turnover of the auto industry amounted to ca USD 145 billion in 2015-16 while the overall installed capacity was ca 32 m units at the end of 2014-15.
The auto industry provides direct or indirect employment to over 13 million people.

Domestic motor vehicle sales in 2016-17 included 3.05 m passenger vehicles, 0.71 m commercial vehicles, 0.51 m three wheelers and 17.59 two-wheelers. The luxury car segment is relatively small with sales of over 39 000 cars in 2017 and just over 40 000 cars in 2018. The total number of registered motor vehicles reached approx. 230 million in March 2016.

Passenger Vehicle Sales (2016-17)

Type

Sales (thousands)

Passenger car

2103

SUV

762

Van

182

Automotive Components and Tyres

The total turnover of the Indian automotive component industry increased to ₹ 3.46 trillion (USD 51 billion) in 2017-18. Auto ancillary exports fetched ₹ 906 bn (USD 13.5 bn) in the same year while the
total turnover of India's vehicle tyre industry amounted to an estimated ₹ 450 billion in 2013-14.

New Entrants

Future new entrants into the Indian auto market include MG Motor, owned by the Chinese auto manufacturer SAIC and the French Groupe PSA, the latter making a re-entrant for the first time since the production of the Peugeot 309 model by Premier Automobiles (PAL) in the 1990s.
South Korea's Kia Motors, another new entrant in the Indian auto market, is investing USD 1.1 bn in a new auto plant (capacity 300 000 units pa) located in Anantapur district of Andhra Pradesh. The plant is expected to start rolling out cars (upto six models) in the latter half of 2019. Kia Motors' first offering will be a SUV. Volvo Cars commenced the assembly of SUVs in India in Oct '17 while GM withdrew from the Indian auto market although it continues to export cars from its India plant.

MG Motor India will most likely launch the RX5 SUV (electric version also available) in 2020. The Chinese SAIC Motor owned brand is expected to initially launch a compact SUV in Q2/19. MG Motor cars will be manufactured at the modernized ex-GM plant located in Halol, Gujarat.

Electric, Hydrogen and Hybrid Vehicles

The Government of India had announced an ambitious target of all-electric vehicle sales by 2030. Electric car sales (only 1 200 units sold in FY18) are still at a very nascent stage in India but the gradual dependence on the fossil fuel combustion engine is bound to decrease in the long run. A solid framework and incentive package needs to be in place to woo present and new manufacturers to invest in sub ₹ 1 million hybrid/electric car production where more larger volumes can be expected.

Mahindra Electric manufactures two EV models (the compact e2oPlus and the eVerito sedan) and is working on higher range electric powertrains with a longer range. An electric version of the compact KUV100 model is planned to be launched in 2019. An electric version of a SUV based on the SsangYong Tivoli platform is expected to be launched in 2020.

Tata Motors is reportedly working on an EV version of its popular Tiago hatchback car. The first batch of the Tigor hatchback electric version cars was rolled out from Tata Motor's Sanand (Gujarat) plant in Dec '17.

An electric Olectra Greentech e-Buzz K7 BEST bus in Mumbai. BEST (Brihanmumbai Electric Supply & Transport), the undertaking operating city buses in Mumbai has a small fleet of e-buses in addition to over 3 000 conventional buses (mostly CNG) incl. over 100 Ashok Leyland double-deckers.

Registered Motor Vehicles by Type as at 31 Mar 2016 (in millions)

Two-Wheelers

Cars

Jeeps and Taxis

Buses

Goods Vehicles

Misc (incl. tractors and three-wheelers)

169

25.6

4.6

1.8

10.5

18.5

Registered Motor Vehicles (in millions)
Top 10 States (31.3.2016)

Maharashtra: 27.9

Tamil Nadu: 24.2

Uttar Pradesh: 23.9

Gujarat: 20.3

Karnataka: 16.3

Rajasthan: 13.6

Madhya Pradesh: 11.1

Kerala: 10.2

Delhi: 9.7

Punjab: 9.1

Domestic Motor Vehicle Sales
(Apr 2017 - Mar 2018)

Passenger Vehicles: 3.29 million units

Commercial Vehicles: 0.86 m

Two-wheelers: 20.19 m

Three-wheelers: 0.64 m

TOTAL: 24.97 million units

Marine Drive is a major thoroughfare in south Mumbai. The wide boulevard was built on reclaimed land and is lined with art deco apartment buildings.

Above video clips: Hyderabad's total motor vehicle population amounted to almost 5 million (inc. 850 000 cars) in 2016. Road congestion and air/noise pollution are some of the more serious effects. Hyderabad also lacks an efficient, integrated public transport. The first phase of the metro rail system was completed in Dec '17 and once fully commissioned, should provide a better and more environment friendly means of mass urban transit.

Number of Registered Cars and Motor Vehicles (in millions) in Selected Cities - March 2016

Automotive Research

Passenger Car/Utility Vehicle Manufacturers

Audi sells the A3, A4, A6, A8 L, Q3, Q5, Q7, S4, S5, RS 6 Coupe, RS 7 Sportback, TT Coupe, and R8 range of models.
Audi competes in a niche market along with BMW and Mercedes cars and sold 7 876 in 2017 (7 742 units in 2016 and over 60 000 cars since the company began operations in India).
Audi assembles the A4, A6, Q3, Q5 and Q7 models at ŠkodaAuto's plant located at Aurangabad, Maharashtra while the other models are imported from Ingolstadt, Germany.
Audi cars are available through over 60 dealers across India.

Fiat has had a long presence in India. Prior to FCA India, Fiat had a technical collaboration with Premier Automobiles, for the manufacture of the popular Padmini model, a small sedan based on the third generation Fiat 1100D dated from the early sixties.
Fiat India's other former cars included the Uno, Siena and Palio. Fiat's sales in India have in recent years failed to make any significant dent in the Indian auto market with total car sales amounting to 6 584 units in 2016. FCA launched the Jeep Compass SUV in July '17. The Compass is manufactured at FCA's Rangangaon plant. The new Tata Nexon SUV is also manufactured in the same plant along with the presently manufactured Tata Bolt, Tata Zest, Fiat Punto and Fiat Linea models. Possible future launches include the Jeep Renegade SUV.

Jeep brand vehicles

Jeep Compass - FCA's new SUV model comes in two engine variants, a 2.0L turbo diesel and a turbocharged 1.4L petrol. Indian made Jeep Compass SUV's are also exported to markets such as Japan and Australia. The Compass SUV has been well-received in India with total sales of over 23 000 units till May '18 and 8 000 units sold in overseas markets.

Ford India sold 249 874 cars in 2016-17 of which 158 469 were exported and 91 405 units sold in India. Car export destinations include countries such as South Africa, the Middle East region and a few European countries. Ford operates two auto plants in India - Chennai (Tamil Nadu) and Sanand (Gujarat). The latter facility has manufactured 100 000 cars till Sep '16. The two plants have an annual capacity to manufacture upto 480 000 cars and 610 000 engines.

HCIL manufacture models inclue the Amaze, Jazz, City, CR-V and Accord models. HCIL's two auto plants are located
in Surajpur, Greater NOIDA, U.P and Tapukara (Bhiwadi), Rajasthan with a capacity to manufacture 100,000 cars per annum. Honda India's domestic sales amounted to 170 026 cars during 2017-18. Honda began exporting Brio cars to South Africa/SADC countries in Oct '12 and exported a total of 5 610 cars during fiscal year 2017-18. Honda has sold 1.5 million cars since 1998 when Honda Siel Cars (former name of the company) begain producing Honda City sedans. The Civic sedan model will be re-launched (earlier sales discontd. in 2013) in Mar.

Honda Brio Production of the Brio has ended. Honda sold around 97 000 Brios since its launch in 2011.

Honda Jazz - Honda's new supermini hatchback is powered by a 1.2 liter petrol engine with 89 bhp output. Production of the old Jazz model ended in March '13 and a new generation version was launched in 2014. Honda has sold ca 23 000 Jazz cars till Feb '13.

Hyundai Motor India's two adjacent car plants at Irungattukotai near Chennai have a combined capacity of 700 000 cars per annum, the parent company's largest auto manufacturing facilities outside of South Korea. HMIL plans to invest an additional ₹ 70 bn for expansion of its capacity to 800 000 units. Domestic auto sales amounted to 527 320 units in 2017 (275 136 units in H1/18) while cars exported totalled 153 942 units during 2017/18 (73 548 in H1/18). HMIL had sold ca 5.4 m cars (8 m units sold for both overseas and in India) within India by Jun '18. HMIL exports cars to 87 countries across the globe.

Isuzu Motors India manufactures a range of pickup and a SUV model from its plant at Sri City, Andhra Pradesh where manufacturing started in 2016. The plant has a capacity to manufacture upto 50 000 vehicles per annum. Isuzu sold around 3000 vehicles in 2016/17.

mu-X - a seven seater SUV available both as 4x2 and 4x4 traction and 5-speed automatic transmission.

Kia Motors is making a debut in the Indian car market in 2019. Trial production of the SP2 SUV (SP Concept) will commence in Jan '19 at the newly built Ananthapur (AP) auto plant with an annual capacity of 300 000 vehicles. The SP2 is expected to be commercially available in H2/19.

M & M sold over 548 000 motor vehicles in 2017-18 of which over 520 000 were sold in India and ca 28 000 exported in. Group revenue increased to almost ₹ 476 bn. The company manufactures motor vehicle products at plants located across six Indian states incl. Chakan, Igatpuri Kandivali, Nagpur and Nashik in Maharashtra, Jaipur in Rajasthan, Mohali in Punjab, Haridwar and Rudrapur in Uttarakhand, Pithampur in Madhya Pradesh and Zaheerabad in Telangana. New models include the Marazzo MPV model launched in Sep '18. Ssangyong's Rexton G4 SUV was launched in Nov '18 and named as Alturas G4 for the Indian market.

MSIL began manufacturing Suzuki Alto model cars in Dec 1983 in Gurgaon after which it quickly overtook both Hindustan Motors and Premier Auto to become India's largest car manufacturer as early as the mid-eighties. The company's net sales amounted to ₹ 781 billion in 2017-18 while total auto sales increased to 1.78 million units (incl. 126 000 cars exported) in the same year. Suzuki Motor Corporation of Japan has a 56.2 % stake in MSIL. MSIL's total auto production crossed 20 million in June '18 while car exports reached the 1.5 m mark in Sep '16.

MSIL currently operates four assembly plants including an auto/transmission/engine plant in Manesar (Haryana) through a joint venture (Maruti Suzuki Automobiles India) with Suzuki Motor Corp. MSIL has a total auto manufacturing capacity of 1.55 million units per annum.

Swift - The sales of this popular hatchback reached 2 m units in Nov '18. The model was launched in 2005.

Nissan sells a range of eight cars (some branded as Datsun) in the Indian market through a 95 dealer network. Nissan's production in India includes the Micra, Sunny and Terrano model at the Renault Nissan plant (capacity: 480 000 units pa) located near Chennai. Nissan Motor India sold 151 001 cars in 2015/16 of which export accounted for 111 612 units and domestic sales at a lower volume of 39 389 cars (57 315 in 2016/17). Total exports since Nissan began production in India has surpassed 700 000 units.

Premier produces a compact SUV called the RiO with total sales till date (Nov '11) amounting to ca 2000 units.
Premier, the erstwhile manufacturer of the Premier Padmini small sedan made a comeback with the launch of the RiO mini SUV, based on the Chinese Zotye Nomad model. The RiO is reasonably priced at less than ₹ 500 000 and is powered by the Peugeot TUD5 1.5 l diesel engine. Premier also manufactures LCV's.

Renault India's current range of cars include the Lodgy MPV, Duster crossover, Captur SUV and the KWID hatchback. Renault India sold 112 489 cars in 2017 (132 235 in 2016) through a network of 320 dealership facilities.

Škoda Auto India's product range includes a range of cars assembled at Škoda's Aurangabad
plant, ŠkodaAuto's first auto assembly plant setup outside of Europe. The current capacity is 50 000 units per annum. Škoda sold 13 712 cars in 2016-17 and has made a rebound in 2017 with sales increasing to 17 438 units. Škoda Auto has established itself in the Indian auto market having produced around 250 000 cars (early 2018) since the end of 2001.

Suzuki Motor Gujarat Private Limited (SMG)

SMG is a fully owned subsidiary of the Japanese Suzuki Motor Corporation. Car production commenced in Feb 2017 at a plant located near Hansalpur, Gujarat. The plant has an annual capacity of 250 000 vehicles. Another plant is under construction for the production of engines and transmission units. Vehicles produced for Maruti Suzuki include the Baleno and Swift hatchbacks. The second SMG auto plant (annual capacity 250 000 vehicles) in Gujarat began production of the Swift hatchback in Jan '19 Domestic production is supplied to Maruti Suzuki. A powertrain plant was also commissioned.

Tata's low-cost (approx. 2 500 USD) people's car, the 4-door Nano, was unveiled at the AutoExpo 2008 in Delhi and launched on Mar 23 '09. Tata invested approx. ₹ 17 bn developing and producing the Nano. A dedicated auto plant (with an annual production capacity of 250,000 units) for the Nano at Sanang, Gujarat was inaugurated in June 1010. Unfortunately production of the Nano has practically come to a standstill in 2018 and production will end by Apr '20. Tata Marcopolo Motors Ltd. (TMML) manufactures fully built buses and coaches incl. low-floor intra-city models. Tata sold 14 917 buses in India in 2015-16. A new SUV christened as Harrier is expected to be launched in Jan '19. A new hatchback, codenamed 45X, is expected to be launched in Aug '19.

A sleek DTC Tata intracity Starbus in central Delhi. Tata Motors and Ashok Leyland made low-floor buses are used on an increasing number of bus routes throughout Delhi comprising a fleet of over 600 buses (total bus fleet is 3,850), a few of which are AC CNG buses. Quite a few other Indian urban transport companies, including those operating in Bangalore, Chennai, Pune, Indore, Kolkata, Mysore, Navi Mumbai and Mumbai (54 cities in total) are gradually deploying modern buses under a funding scheme provided by the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) for the financing of new passenger transport equipment (14,240 buses as of Feb '09). The majority of intracity buses in India are built on Ashok Leyland or Tata truck chassis which make them rather uncomfortable and entry/exit difficult.

A view of the dashboard of a Tata Indigo. Tata has sold over a million Indicas/Indigo cars.

Volkswagen operates a 200 000 car annual capacity plant in Chakan near Pune (Maharashtra) spread over 570 acres. The plant manufactured over 135 000 cars in 2017-18 of which 45 239 were sold in India. VW India rolled out its ½ millionth manufactured car in May '15. View of VW India auto plant

These car models are priced at approx. ₹ 4 million and ₹ 5 million respectively and are imported from Volvo's Gothenburg factory in Sweden. Volvo sold 2 029 cars in 2017 (1 896 cars during Jan-Sep '18), an increase over the 1 584 cars sold in 2016.
Volvo Cars commenced assembly of the XC90 SUV in Oct 2017 in a plant located in Hoskote near Bengaluru. The XC60 SUV is also assembled in Volvo's India plant.

Lamborghini's offerings include the Aventador and Huracan sports cars. The Aventador S super sports car costs around ₹ 50 m. Lamborghini sold 45 cars in 2018 and sales for 2019 should increase with a strong demand for the Urus SUV.

Roll-Royce cars are sold through RR dealers located in Mumbai, Delhi, Hyderabad and Ahmedabad. The flagship RR Phantom Rolls-Royce bears an ex-showroom price tag of ₹ 95 m and ₹ 114 m for the standard and extended wheelbase variants making these the costliest cars sold in Indina. India is now RR's third largest market in the Asia-Pacific region with estimated sales at over 250 cars since the marque was relaunched in India in 2005. Earlier on India was a major market for Rolls-Royces.
According to John M. Faisal, an automobile historian, as many as 900 cars with the famous Spirit of Ecstasy mascot on the bonnet were sold to Indian princes before 1947.
Read more here: Maharajas' rendezvous with Rolls-Royce >>

Defunct Car Manufacturers

General Motors is phasing out auto sales in the Indian market although export production will continue at its Talegaon (Maharashtra) plant. SAIC is reported to be proceeding in a buyout of GM's former Halol (Gujarat) facility. GM sold 25 823 cars in 2016-17. GM produced around ½ million cars for the Indian market ever since launching its first offering, the Opel Astra sedan in 1996.

HM was a Kolkata based car manufacturer with manufacturing facilities at Uttarpara (West Bengal), Pithampur (Madhya Pradesh), Thiruvallur (Tamil Nadu) and Hosur (Karnataka). HM sold 9,211 motor vehicles in 2008-09 including Mitsubishi models.
Ambassador (petrol, diesel and CNG) - Production of the Ambassador which was based on an early 50's Austin Oxford model ended in 2014. Over 800 000 Ambassadors were produced.

Image above: A Hindustan Contessa in Hyderabad. Contessas are now a rare sight on Indian roads. The Contessa's body is based on the early-seventies Vauxhall Victor (Opel Rekord). Production of the Contessa spanned two decades from 1982. Production ended in 2002. The Contessa was one of the few more luxurious cars built in India (alongwith the Standard Motors' Standard 2000 model) prior to economic reforms in the early nineties.

Commercial Vehicle Manufacturers/Importers

Ashok Leyland manufactures Iveco trucks in addition to buses and other light, medium and heavy commercial vehicles. The company sold 174 873 vehicles in 2017-18 with total revenues of ₹ 262 bn. AL's bus sales in India amounted to 19 586 in 2015-16. AL has plants located at Ennore, Sriperumbudur, Hosur (all in Tamil Nadu), Bhandhara (Maharashtra), Alwar (Rajasthan) and Pantnagar (Uttarakhand).

Daimler sold 13 081 trucks in 2016 and over 55 000 units (till Oct '17) since launching the BharatBenz range of trucks in 2012. Truck exports increased to 4 300 units in 2016. DICV's plant is located in Oragadam, Tamil Nadu producing a range of light, medium and heavy-duty trucks in the range of 9 to 49 tons.

The Force Motors (erstwhile Bajaj Tempo) product portfolio includes a range of LCV's, utility and commercial vehicles.
Force Motors has also planned a joint venture with Neoman for the manufacture of chassis and complete buses.

Olectra Greentech manufactures electric buses in collaboration with Chinese BYD Auto Industry, the latter being the largest electric vehicle manufacturer in the world. A few of the eBuzz K7 buses are operating in eg Mumbai (BEST Undertaking) and for Himachal Pradesh Transport Road Transport Corp (HTRC). The electric buses come with a range 200 kms when fully charged. Charging takes less than 4 hrs.

Volvo India manufactures FM12 and FM9 series rigid/trailer trucks. Volvo also manufactures buses (capacity: 1800 units pa). Volvo's Hoskote (Karnataka) plant has an installed capacity of 4000 trucks pa. in double shifts. Volvo has sold over 6 000 buses since 2001.
Volvo sold around 700 buses in 2012. Volvo is exporting trucks to South Korea in addition to some of the neighbouring countries.
A new joint-venture, Volvo Bus BodyTechnologies, manufactures bus bodies in a plant located at Hoskote, Karnataka. A target has been set to sell 450 buses, including a new version of the Volvo 9400 inter-city model, this year.

Two/Three Wheeler/Quadricycle Manufacturers

India's second largest two/three-wheeler manufacturer (2016-17 net sales ₹ 214 bn) and the world's third largest in terms of volumes. Bajaj Auto sold 3.67 million units in 2016/17 incl. 1.4 m units for overseas markets. Bajaj Auto's three plants are located at Waluj (Aurangabad, Maharashtra), Chakan (Dist. Pune, Maharashtra) and Pantnagar (Uttarakhand) with an annual total production capacity of over 6 m units and employing over 9500 persons.

The Supreme Court of India approved quadricycles in 2018 as a new vehicle category (kerb weight under 475 kgs for this class) and once the Bajaj Qute has passed the mandatory safety and crash tests the model is expected to be launched in India and available to consumers. The vehicle is powered by a 216 cc one cylinder petrol engine.

Classic Legends, a subsidiary company of Mahindra & Mahindra Ltd, will introduce the legendary Jawa motorcycle brand in India. Three models will be available in 2019 featuring 293/334 cc single cylinder DOHC engines producing 27 to 31 bhp. BSA, another historic brand, is also reportedly making a comeback.

Hero MotoCorp Honda, the world's largest two-wheeler manufacturer, sold over 7.2 million units (mainly motorcycles) in 2017. The company has plants located at Dharuhera (Haryana), Gurgaon (Haryana), Haridwar (Uttarakhand) and Neemrana (Rajasthan). Net income amounted to ₹ 290 billion in 2015-16.

Honda manufactures scooters and motorcycles at four plants located in Manesar (Haryana), Tapukara (Rajasthan), Vithalapur (Gujarat) and Narsapura (Karnataka). The company sold 5.008 million two-wheelers in 2016-17. Exports amounted to 283 153 units.

Manufacturer of the legendary "Bullet" motorcycles. The Indian Police and defence forces use "Bullet" motorcycles. Royal Enfield sold 452 812 motorcycles (incl. export of 8 285 units) in 2015. Royal Enfield operates two factories located at Chennai and Jaipur.

TVS Motor Co., the eight largest 2-wheeler manufacture in the world, recorded net sales of ₹ 223 bn and sold 3.34 million two-wheelers in 2015-16. TVS's plant is located at Hosur, Karnataka. TVS launched it first 3-wheeler, the TVS King, on March 9 '08. The 3-wheeler segment was till now dominated by Bajaj Auto and Piaggio.

Government owned Scooters India Ltd. (1998-99 turnover: 1.36 billion Rupees) produced over 16,000 Vikram range of three-wheelers last year. SIL produces an electric 3-wheeler, the Vikram-EV. Vikram-EV is driven by a DC motor capable of delivering 7.5 bhp. A gas powered three-wheeler is also under development.

Tractor Manufacturers

Manufactures tractors and diesel engines at a plant located at Ranipet, Tamil Nadu. The company, a subsidiary of Italy's Same Deutz-Fahr, plans to expand its capacity to 11,000 units per annum by 2010.

The world's largest (volume wise) tractor manufacturer sold 317 531 tractors in 2017-18 of which 302 082 units were sold in India and 15 449 tractors were shipped to various countries. Mahindra USA sold 22 636 tractors in 2017-18.M&M also operates CKD facilities in Mexico and Brazil.